Assignment2 module 9 (final copy)
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Transcript of Assignment2 module 9 (final copy)
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PREPARED FOR : PROF. DR. ZORAINI WATI ABAS
ASSIGNMENT 2 : TIME VALUE OF MONEY
GROUP MEMBERS:
•MOHAMAD AFZHAN KHAN•SANTHANA DASS
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Short story (accounting people do use technology)
“Tell me and I ' l l forget; show me and I may remember; involve me and I ' l l understand.” (Chinese Proverbs quote)
To Involve you……..
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i-LECTURE
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EXAMPLE OF I-LECTURE
Prof due to copyright issues, I am unable to upload the i-lecture. Please note.
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EVOLUTION OF TECHNOLOGY
SOLVING TVM USING TECHNOLOGY
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TO SUPPORT LEARNING
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SOFTWARE TO COMPUTE TVM
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ENHANCEMENT
URL from YouTube:http://www.youtube.com/watch?v=8JSY4GZ-aSUhttp://www.youtube.com/watch?v=BXm5mZqMp6Y
URL from website:http://www.investopedia.com/articles/03/082703.asp
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CONCLUSION
Short story: Don’t draw conclusions until you know all the facts
Thank you
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Mohamad Afzhan Khan
TIME VALUE OF MONEY
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Investment with Compound Interest
The total amount of money, denoted by S is the compound amount for a sum of money P compounding after n-th year, where the interest is payable k times at the rate of r% per annum, is given by the formula below:
Where: S = compound amount or the prospective value P = initial investment or the principal value r = interest rate per annum k = number of interest paid (compound) in a year n = number of year
1nk
rS P
k = +
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Investment with Compound Interest (cont.)
If RM1000 is invested at the rate of 6% per annum, compounding (payable) every quarterly, what would the total amount be in the account after 10 years?
Determine the principal amount of a loan, given that the prospective amount payable after 10 years is RM21,589.20 and the compound rate of 8% per annum, compounding (payable) on yearly basis.
( )( )
( )( )
10 4
40
1
0.061000 1
4
1000 1.015
1000 1.81402
1814.02
nkr
S Pk
S
S
S
S
= +
= + =
==
( ) ( )
( )( )
10 1
10
0.0821589.20 1
1
21589.20 1.08
21589.20 2.15892
21589.20
2.1589210000
P
P
P
P
P
= + =
=
=
=
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Question
Self Test:
Determine the present value of an investment worth RM9600 at 5.00% per annum compounding annually for 12 years.